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Elections Give New Power
To Smaller Companies

By

Rodney HoStaff Reporter of The Wall Street Journal

Updated Nov. 7, 1996 12:01 a.m. ET

Small-business owners, who have seen their power in Washington grow in recent years, enjoyed new gains in Tuesday's elections. Several additional entrepreneurs were elected to Congress, and small business chalked up a number of victories in key state referendums and initiatives.

Chuck Hagel, a Nebraska Republican who started a successful cellular-phone business, was elected to the Senate. New representatives will include Ruben Hinojosa, a Texas meatpacking-business owner and Democrat; Bob Riley, a Republican auto dealer and trucking-company owner in Alabama; Allen Boyd, a Florida farmer and Democrat; and Chris John, a Louisiana Democrat and trucking-company owner.

"There's a theme for most of these new reps we support: They want no big government," said Lonnie Taylor, U.S. Chamber of Commerce vice president of congressional affairs.

Most Republican small-business owners who entered Congress in the 1994 GOP sweep kept their seats. But freshmen Republicans in the last Congress who lost on Tuesday after reaching the House in 1994 include concrete-company owner Frank Cremeans of Ohio, mobile-home park owner Randy Tate of Washington, insurance-company owner James Longley Jr. of Massachusetts and farmer Jim Bunn of Oregon.

No 'New Burdens'

Small-business groups felt that the overall Republican victory in Congress would bode well for entrepreneurs. John Satagaj, president of the Small Business Legislative Council, a consortium of small-business trade groups, said that maintaining a Republican majority "assures us that no harm will be done" to small business. "We will not see a Democratic Congress that will initiate legislation that will impose new burdens on us," he added.

Small-business groups generally were fairly pleased with results of state referendums and initiatives. Efforts to raise the minimum wage above the federally mandated $5.25 an hour failed in Montana, Missouri and the city of Denver. But such increases were approved in Oregon and California. Many entrepreneurs fear these initiatives because they often hire low-wage help.

In a victory for small-business advocates, Nebraska voters overwhelmingly defeated a proposal to cap property-tax levels. The National Federation of Independent Business said it believed that without provisions to cut spending as well, any reduction in property taxes would have led to increased income or sales taxes.

Rejection in Maine

Maine voters soundly rejected an initiative to practically ban clear-cutting of forests, curbs that small-business lobbyists said would hurt economic growth. A less severe compromise measure won a plurality but fell short of a majority vote. Maine law requires that the measure be submitted to voters again in the next statewide election.

In California, two attorney-supported propositions opposed by small business were both defeated. One would have prohibited caps on fees paid to trial lawyers, and another would have made it easier for citizens to sue for fraud.

A California proposal to subject most local taxes to a public vote split the small-business community but passed easily. Some technology companies in high-growth areas worry that the limitations will hinder infrastructure improvements.

California voters also narrowly defeated an increase in income tax for the wealthy, which small businesses lobbied against.